A new week kicks off with volatility, failed highs, and decisive reactions — welcome to your trading battlefield.
Guten Morgen, Traders! After a late-week surge and a failed breakout at the 24,000 mark, the DAX enters the new week with energy and tension. Price action has shown its cards: upward momentum is faltering, and early signs of a correction are in play. Let’s break down what drove Friday, what to expect today, and where the key zones lie for potential entries.
🔁 Market Recap – Friday, May 9, 2025
🔹 Key Drivers:
- U.S. PPI and Sentiment Data: Mixed bag — Core PPI held steady at 2.3%, but U.S. Consumer Sentiment dropped to 76.0 (vs. 77.2 prior). This supported a “higher-for-longer” yield narrative that pressured global equities late in the session.
- DAX Reaction: A strong Friday open turned into a bull trap. The DAX rocketed into the 23,950 zone on light volume, only to sharply reverse and close well off the highs.
- ECB Watch: No rate guidance shift, but sticky wage growth continues to cap enthusiasm for rate cuts. German bunds held steady.
📅 Economic Calendar – Monday, May 12, 2025
| Time (CET) | Event | Forecast | Prior |
|---|---|---|---|
| 11:00 | Eurozone Industrial Production (MoM) | +0.2% | +0.5% |
| 14:30 | U.S. NY Empire State Manufacturing Index | -10.5 | -14.3 |
🔍 Implications:
- A soft industrial print in the Eurozone could weigh on cyclical German names like BASF and Siemens.
- If the U.S. Empire State Index surprises to the upside, expect U.S. yields to rise, strengthening the dollar and putting pressure on global equities — including the DAX.
📊 Technical Analysis – Monday, May 12, 2025
🧭 Chart 1: EMA Cross, Volume, RSI
- EMA stack was bullish into Friday, but today’s price has pierced below the fast EMAs.
- RSI sharply dropped from 70+ to 36, momentum clearly rolled over.
- Volume spiked on the selloff, showing conviction on the reversal.
📌 Signal: Momentum is now bearish. Watch for a retest of 23,653 and failure for confirmation of short-term downtrend.
📈 Chart 2: Bollinger Bands & ATR
- Price tagged the upper Bollinger Band near 23,958, then violently reversed to breach the mid-band and nearly hit the lower band at 23,636.
- ATR is elevated (42.3), confirming rising volatility — markets are reactive and prone to overextension.
📌 Signal: Volatility is expanding. Expect high-energy directional moves; failed bounces are short setups.
📉 Chart 3: MACD & ADX
- MACD sharply crossed bearish with histogram deeply negative.
- ADX at 34.6 shows a strong trend shift — trend energy is accelerating.
📌 Signal: A confirmed bear trend is active on lower timeframes. Momentum favors downside plays.
🧱 Chart 4: Support & Resistance
- Key support broke at 23,720 and is now resistance.
- Next horizontal support lies at 23,652 — a breach opens downside toward 23,523.
📌 Signal: Key structure has cracked. Bears control unless 23,720 is reclaimed with volume.
📐 Chart 5: 40 SMA Trend Shift
- Price reversed from well above the shifted 40 SMA (approx. 23,742), now trading just below.
- This reflects a momentum pivot from bullish to neutral-bearish.
📌 Signal: If price holds below 23,742, expect medium-term sellers to remain active.
🎯 Chart 6: Peak Reaction Zones
- Price was rejected exactly at 23,958 (upper PRZ) — a clean reversal signal.
- Lower reaction zone now sits near 23,089, with intermediate zones around 23,523.
📌 Signal: 23,958 = rejection zone confirmed. Look for buyers to defend 23,523 → break targets 23,089.
🧭 Chart 7: Daily Pivots
- Pivot: 23,494
- S1: 23,413 | S2: 23,284
- R1: 23,704 | R2: 23,833
📌 Signal: Price broke through the pivot and is targeting S1 and S2. Reclaim of 23,494 flips bias short-term.
📌 Trading Signal – May 12, 2025
Bias: Bearish short-term
Trade Setup:
- Entry: Short 23,720 (on retest rejection)
- Stop: 23,805 (above local breakdown zone)
- Target: 23,413 (S1 pivot support)
- R:R: ~3.4:1
🎯 Comment: Momentum shift confirmed with volume. Bearish momentum accelerating — wait for failed retest of broken support.
🧠 Synthesis & Strategy
The DAX opens the new week in a vulnerable position. Friday’s late-day rejection from 23,958 and today’s aggressive pullback mark a clear momentum reversal. Indicators across MACD, RSI, and Bollinger Bands show deteriorating strength and increasing volatility — a combination that favors tactical selling on bounces.
The technical breakdown of 23,720 flips short-term control to bears. Bulls must now reclaim that level and hold above the pivot (23,494) to resume upside structure. Until then, sellers are likely to target 23,413 and potentially 23,284 if macro data worsens.
This is no longer a range — it’s a reaction.
🚀 Final Word
After a false breakout and a swift pullback, the DAX is caught in the crosshairs of volatility and structure breaks. Price action favors the sellers below 23,720, with lower pivots and peak zones now acting as magnets. Eurozone industrial data and U.S. sentiment will dictate whether this turns into a deeper slide or a temporary flush.
Stay focused, stay technical — the key levels are active.
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